Consumer Corner: Love it or hate it, we all benefit from tax dollars

Americans have a love/hate relationship with government and taxes: They love what the government can do for them individually but hate paying for benefits that help others.

A national survey released last week by Washington University in St. Louis indicates Democrats and Republicans have vastly different ideas about where the federal government should spend tax dollars -- although both groups participating in the American Panel Survey said they support increasing taxes on the rich.

An earlier Cornell University study found many Americans do not recognize what they get from the government -- tax breaks on home mortgage interest, Social Security benefits, unemployment insurance payments and the like -- as a form of government assistance. And an Indiana University survey found the states most staunchly conservative, touting smaller government and lower taxes, get some of the biggest government payouts.

Go figure.

The Weidenbaum Center on the Economy, Government and Public Policy at Wash U plans to conduct its American Panel Survey monthly, querying the same group of 2,000 citizens divided into two camps -- one supporting President Barack Obama and the other supporting former Massachusetts Gov. Mitt Romney. The first such poll, which had an error margin of 4 percentage points, was conducted in January and asked respondents whether spending tax dollars on each of several categories should increase, decrease or stay the same.

Both sets of panelists said they supported increased spending for Social Security -- 56.9 percent of Obama supporters and 36.6 percent of Romney supporters -- and veterans health programs -- 59.9 percent of Obama supporters and 46.3 percent of Romney supporters.

The vast majority of Obama supporters (72.8 percent) said they'd like to see corporate income taxes increased while the Romney supporters were rather evenly split on the issue: 32.3 percent for an increase, 29.4 percent for a decrease and 38.3 percent saying the rates are just fine as they are.

When it comes to taxing the rich, 93 percent of Obama supporters and 67.8 percent of Romney supporters said taxes should be raised on those earning more than $1 million a year. They were a bit more charitable when it came to those earning $250,000 to $1 million: 78.3 percent of Obama supporters and 42.2 percent of Romney supporters said taxes for that income group should be raised. But both sides were in agreement that their taxes should not be increased -- Obamaites, 90.8 percent versus Romneyites, 98.3 percent.

A recent ABC News/Washington Post poll indicated 56 percent of Americans support smaller government and fewer services. Yet a 2008 survey conducted by the Cornell Survey Research Institute found though 57 percent of those queried said they had never "used a government social program," 94 percent of them had benefited from at least one program, be it Social Security, unemployment insurance, the home mortgage deduction or student loans.

"Americans often fail to recognize government's role in society, even if they have experienced it in their own lives. That is because so much of what government does today is largely invisible," said Suzanne Mettler, a professor of government at Cornell, in a recent New York Times op-ed piece.

"Individuals' political views partly account for their perceptions. In the Cornell poll, a respondent who self-identified as 'extremely liberal' was 20 percentage points more likely to acknowledge using a government program than someone who used the same number of programs but was 'extremely conservative.' Also, those who believed that the nation spent too much on welfare were less likely to admit that they had used a 'government social program,' perhaps because that term had pejorative connotations."

An Indiana University survey found those living in what Gallup ranks as the 10 most conservative U.S. states received 21.2 percent of income from government transfers. By contrast, those in the 10 most liberal states received 17.1 percent of income that way.

In 2009, such programs provided $6,583 for every person in the United States, an average of $1 in benefits for every $4 in other income, The New York Times reported. Older people get the bulk of the money through Social Security and Medicare.

The safety net -- originally designed to protect the poorest Americans -- in the last decade has been expanded to help the middle class, resulting in a mushrooming national debt. Whereas state and federal government spent 37 cents of every tax dollar of tax revenue on the safety net in 2000, 66 cents is now spent, the Times reported.

"The threat to democracy today is not the size of government but rather the hidden form that so much of its growth has taken. If those who assume government has never helped them could see how it has, it might help defuse our polarized political climate and reinvigorate informed citizenship," Mettler said.

Americans aren't entirely oblivious. Most recognize benefits like Social Security and Medicare will have to be cut or taxes raised or a combination of the two. At the same time, however, they insist what they have paid into the system will cover what they take out.

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